The present invention relates to repair estimates, invoices, and billing exceptions. In particular, this invention relates to methods and systems for tracking and verifying repair estimates, invoices, and billing exceptions for repairs performed by a vendor for a customer. Although it is applicable to a wide variety of industries, the invention will be described with a particular emphasis on repairs to railcars and equipment in the railroad industry.
The railroad network in the United States includes a number of railroad systems that are owned by different companies. Together, these systems comprise a complete railroad network that connects locations across the nation. Although some railroad companies also own their own railcars, many railcars are owned by other companies that do not own any part of the railroad network itself. To move from one location to another, therefore, one company's railcars frequently need to travel over another company's railroad system.
Repair facilities are positioned at various locations throughout the railroad network. These facilities are available to perform any necessary repairs to railcars in the area. The repair facilities are owned and operated by various railroad companies and independent repair contractors. When a railcar repair becomes necessary, it typically is performed at the nearest repair facility. Under limited authority granted by the Association of American Railroads (AAR) Interchange Rules, the owner of the repair facility acts as a repair agent for the owner of the railcar needing repair. In this way, the owner of a given repair facility may act as a repair agent for a number of different railcar owners. Likewise, a given owner's railcars may be repaired by a number of different repair agents as those railcars travel the railroad network. In these situations, the repair agent is a vendor of services provided to its customer, the railcar owner.
Like many other types of vendors, repair agents may bill railcar owners for repair services by repair event or on a monthly basis. The billing process varies, depending largely on whether the repair facility is owned by a railroad or an independent repair contractor. Independent repair facilities typically bill by repair event.
Billing for railcar repairs performed by railroad-owned repair facilities is generally governed by the AAR Interchange Rules. Under the AAR Interchange Rules, railroad-owned repair facilities typically bill on a monthly basis. A typical monthly bill may include charges for all repairs performed on the owner's railcars at all of the repair agent's facilities. According to these rules, it generally is not necessary for the repair agent to provide an estimate before performing a repair. Instead, the AAR Interchange Rules provide standardized rates for various types of repairs. After a repair facility performs repairs in accordance with the AAR Interchange Rules, a billing repair card is included for each repair. Each billing repair card indicates, among other things, the date of repair, the railcar number, the type of car, the repair location, and a description and cost of the repair, including parts and labor.
If not governed directly by the AAR Interchange Rules (e.g., if the repair is performed by an independent repair contractor), then the cost of repair may be governed by one or more repair agreements between the repair agent and the railcar owner. Typically, a repair agent is required to provide an estimate before performing a repair. According to existing practices, the repair agent prepares the estimate and then sends it to the railcar owner for review. The railcar owner then has an opportunity to approve/authorize, reject, or take exceptions to the repair estimate. The railcar owner also may negotiate with the repair agent regarding the terms of the repair, including the repair fee.
In some instances, a railcar owner may wish to dispute charges billed by a repair agent. For example, the repair agent may have charged the wrong railcar owner, charged more than is allowed by the AAR Interchange Rules or the applicable repair agreement, or failed to justify the charge for a given repair. These situations may be governed by the AAR Interchange Rules or the applicable repair agreement. In these cases, the railcar owner generates an exception to the repair bill, explaining the reasons for disputing the particular repair charges. According to existing practices, the railcar owner prepares an exception packet, which includes an exception letter, copies of the billing repair cards for which exceptions are taken, and any necessary supporting documentation. The railcar owner indicates the reasons for the exceptions on the billing repair cards. The owner sends the entire exception packet to the repair agent. The repair agent reviews the exception packet and approves or disapproves each exception.
For each exception approved or accepted by a repair agent subject to the AAR Interchange Rules, the appropriate repair charges are credited to the railcar owner's account or counter-billed to the repair agent by the railcar owner. For exceptions approved or accepted by independent repair agents, the agent typically generates a new invoice that reflects the adjusted repair fee. In some cases, the repair agent may approve only a portion of an exception, in which case only a portion of the repair charges are credited or adjusted.
The existing system for processing repair estimates, invoices, and exceptions is inefficient and paper-intensive. The railcar owner must wait to receive an estimate, review the estimate, and then communicate its approval or rejection of the estimate to the repair agent. If the estimate is rejected initially, there may be a negotiation between the railcar owner and the repair agent, potentially involving several rounds of communication, before the railcar owner approves a final repair estimate.
The railcar owner also must wait to receive an invoice from the repair agent after a repair is completed. The railcar owner may then review and audit the invoice to ensure that it matches the estimate agreed upon with the repair agent. If there are discrepancies between the estimate and the invoice, then the railcar owner must generate an exception to the invoice and send the exception to the repair agent.
The railcar owner then must wait to receive an exception approval from the repair agent before its account is credited or the invoice is adjusted. The repair agent, however, must investigate the repair to which an exception is taken to determine whether the charges are appropriate. In many cases, a manager of the repair agent separates the billing repair cards according to the facility that performed the repairs. The manager then distributes the billing repair cards to field representatives at the various repair facilities for their comments. Once the manager receives comments from all of the field representatives, the manager makes a final decision to approve, disapprove, or partially approve each exception. The manager then sends these responses to the railcar owner. This process typically requires months to complete. Moreover, the shipping and handling associated with all of this correspondence is expensive for both the repair agent and the railcar owner. Accordingly, there is a need for a more efficient and less expensive method and system for tracking and processing billing exceptions.
It is, therefore, an object of the present invention to provide an improved method and system for efficiently tracking and verifying repair estimate, invoices, and billing exceptions for repairs performed for a customer by a vendor. It is another object of the present invention to provide an improved method and system for efficiently tracking and verifying repair estimates, invoices, and billing exceptions for charges billed by a repair agent to an equipment owner, preferably in a manner that complies with the AAR Interchange Rules. It is another object of the present invention to provide railcar owners and their agents with a single integrated system for tracking and verifying billing data for repairs performed by both railroad-owned repair facilities and independent repair facilities.